The former Real Madrid boss is to travel to the Iranian capital, Tehran, on Sunday to hold negotiations with Kaffashian, Goal.com reported on Saturday.
If the two sides reach an agreement, Queiroz will lead the Iranian outfit for the next three years with an annual salary of about two million dollars.
Queiroz has won several awards as a coach in junior levels, and he has been fairly successful at senior and club levels.
He is considered the discoverer of the Portuguese "Golden Generation" in the early 1990s, which include Luis Figo and Rui Costa.
The 57-year-old coach was Sir Alex Ferguson's assistant manager at the English club Manchester United for a long time.
In July 2008, he left Old Trafford to become the head coach of the Portuguese national football team.
Queiroz was sacked by the Portuguese Football Federation in September 2010 after Portugal's poor start to its Euro 2012 qualifying campaign.
Iran faces Russia in a warm-up match at the Sheikh Zayed Sports City in Abu Dhabi, the UAE, on February 9.